Social Security Faces a 22% Benefit Cliff, and Households Are Quietly Planning Around It
With the program's trust fund on track to deplete next decade, advisers are seeing more clients build retirement income that doesn't depend on Washington.
The Social Security trust fund is on track to be depleted in the early 2030s, an event that, absent action from Congress, would trigger an automatic benefit cut of roughly 22% for current and future retirees.
The arithmetic has been well known for years. What has changed is how seriously households — and the advisers who serve them — are treating it. Practitioners report a sharp rise in plans that explicitly model a permanent reduction in benefits starting in 2033, and a corresponding shift toward income sources that are not subject to political risk: laddered Treasuries and TIPS, dividend equities, multi-year guaranteed annuities, and part-time work in early retirement.
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